Transcript Assessing Competitiveness The use of composite indexes for benchmarking progress Geneva, 21.10.2014

Assessing Competitiveness
The use of composite indexes for benchmarking progress
Geneva, 21.10.2014
The Global Competitiveness & Benchmarking
Network
Flagship product:
 The Global Competitiveness Report series
 Launched in 1979 covering 16 countries
 GCR 2014-2015: 144 economies
Other special topic and regional reports:
 The Global Information Technology Report
 The Global Enabling Trade Report
 The Travel & Tourism Competitiveness Report
 The Gender Gap Report
 The Europe 2020 Competitiveness Report
What we aim to measure:
What lies behind different growth paths?
Source: IMF, World Economic Outlook database, April 2014 edition
The Global Competitiveness Index (GCI)
“
The set of institutions, policies,
and factors that determine the
level of productivity of a
country.
The level of productivity,
in turn, sets the level of
prosperity that can be
earned by an economy.
”
More competitive economies tend to
produce higher levels of income
Sources: World Economic Forum; IMF.
The Data
Quantitative data sourced from leading international
organizations
Qualitative data sourced from the annual Executive Opinion
Survey carried out by the network of the 160+ World
Economic Forum’s Partner Institutes.
Survey the perception of 15,000 business leaders Worldwide
Data treatment
Executive Opinion Survey data
•
Exclusion of incomplete, duplicate and “straight answers” surveys.
•
Exclusion of outliers based on multivariate test (Mahalanobis distance
method) to estimates the probability that an individual survey in a
specific country “belongs” to the sample of that country.
•
Scores are calculated based on a moving average (2 years), taking into
account the sample size of each year
Hard data
•
No data imputation, we only use indicators that cover over 90% of the
countries in our sample.
•
Min-max normalization to align hard data with Survey data
Aggregation
•
Simple average at all stages (except for the GCI and EAPI)
A Range of Indexes
Index
What does it measure?
Indicators
Global
Competitiveness Index
The set of institutions, policies, and factors that
determine the level of productivity of a country
144 Economies (Yearly)
14 Pillars
114 Indicators (70%survey / 30%hard)
Network Readiness
Index
The ability of economies to leverage ICT to boost
competitiveness and well-being
144 Economies / (Yearly)
10 Pillars
54 Indicators (50%survey / 50%hard)
T&T Competitiveness
Index
The set of factors and policies that enable the
sustainable development of the Travel & Tourism
sector, which in turn, contributes to the
development and competitiveness of a country
140 Economies (Biennial)
14 Pillars
79 Indicators (40%survey / 60%hard)
Enabling Trade Index
The extent to which economies have in place
institutions, policies, infrastructures and services
facilitating the free flow of goods over borders and
to their destination
138 Economies (Biennial)
7 Pillars
61 Indicators (40%survey / 60%hard)
Europe2020 Comp. Ind
Smart (knowledge based); Sustainable (resource
efficient) and Inclusive (high employment and
cohesive) growth
28 Economies (Biennial)
7 Pillars
71 Indicators (60%survey / 40%hard)
Gender Gap Index
Benchmarks national gender gaps on economic,
political, education, and health-based criteria.
136 Countries (Yearly)
4 Pillars
14 Indicators (10% Survey / 90% hard)
Energy Architecture
Performance Index
The ability to provide a secure, affordable and
environmentally sustainable energy supply
124 Countries (Biennial)
3 Pillars
18 Indicators (5% Survey / 95% hard)
The Indexes in details (1/7)
The Global Competitiveness Index
1.Institutions
5.Higher education
and training
11. Business
sophistication
2.Infrastructure
6. Goods market
efficiency
12. Innovation
3.Macroeconomic
environment
7. Labor market
efficiency
4.Health and
primary education
8. Financial market
development
9. Technological
readiness
10. Market size
Basic requirements
Efficiency enhancers
Innovation and
sophistication factors
The Indexes in details (2/7)
The Networked Readiness Index
The Indexes in details (3/7)
The T&T Competitiveness Index
T&T Regulatory
framework
T&T Business
environment and
infrastructure
T&T Human, cultural
and natural
resources
1. Policy rules and
regulations
6. Air transport
infrastructure
11. Human resources
2. Environmental
sustainability
7. Ground transport
infrastructure
12. Affinity for T&T
3. Safety and security
8. Tourism
infrastructures
13. Natural resources
4. Health & hygiene
9. ICT infrastructure
14. Cultural resources
5. Prioritization of T&T
10. Price
competitiveness in
the T&T industry
The Indexes in details (4/7)
The Global Enabling Trade Index
A. Market access
B. Border
administrati
on
Pillar 2:
Foreign
market access
Pillar 1:
Domestic
market access
6
2
Pillar 3:
Efficiency and
transparency
of border
administration
C. Infrastructure
Pillar 4:
Availability and
quality of
transport
infrastructure
11
Pillar 5:
Availability and
quality of
transport
services
7
6
Pillar 6:
Availability and
use of ICTs
7
D. Operating environment
Pillar 7: Operating environment
17
Foreign market
Domestic market
The Indexes in details (5/7)
The Europe2020 Competitiveness Index
Europe 2020 Flagship Initiatives
The Europe 2020
Competitiveness Index
– Seven pillars
Enterprise environment
An industrial policy for the Globalization Era
A Digital Agenda for Europe
SMART
Digital agenda
Innovation Union
Innovative Europe
Youth on the Move
Education and training
An agenda for New Skills and Jobs
Labour market and
employment
European Platform Against Poverty
Resource-Efficient Europe
INCLUSIVE
Social inclusion
SUSTAINABLE Environmental sustainability
The Indexes in details (6/7)
The Global Gender Gap Index
Economic
participation
and
opportunity
Educational
attainment
Political
empowerment
Four critical
areas for
measuring
the gender
gap
Health and
survival
The Indexes in details (7/7)
The Energy Architecture Performance Index
Our audience
• Policymakers and public institutions (e.g. government ministries,
investment promotion agencies, etc.): To measure the situation in
particular countries in comparison with the performances of other
countries.
• International organizations, development organizations, etc.: To
benchmark policy effectiveness and progress.
• Business leaders: To enter into concrete policy discussions with
government about improving the environment for doing business; to
assess the business environment of selected countries when taking
investment decisions.
• Academia: To conduct quantitative research and further our
understanding about the drivers of national competitiveness.
How are the indexes used ?
Compare
performances
Track progress
Main learnings and questions in using
composite indexes
• Definition and index structure: What are the key dimensions to measure?
Thorough literature review consultations with experts are key to build robust
indexes.
• Selection of indicators: Select indicators that are widely available, linear,
non-binary, updated on a constant basis.
• Distribution of indicators across pillars: PCA analysis can provide an
initial guidance, yet, the range of indicator should also allow for storytelling.
• Weighting: Is there a justification for a specific pillar weighting schemes?
In absence of theoretical guidance, use equal weighting, keeping in mind that
the number of indicators used determines an implicit weighting of factors.
• Normalization: Are there optimal policy targets for each indicator? In
absence of clear policy optimum, use statistical rationale.
Q&A
Visit our website for further information and to download the Report:
www.weforum.org/gcr